My name is John Young, and I'm one of the senior MedTech analysts here at Canaccord Genuity. Thank you all for joining us for our 44th Annual Global Growth Conference. I have the pleasure today to introduce Electromed. With us is CEO Jim Cunniff and CFO Brad Nagel. Thanks, both. Thank you so much for that introduction. Welcome, everybody. It's a pleasure to be here today. I'm Jim Cunniff, and with me today is Brad Nagel, who's our CFO. We're excited to tell you about the Electromed story, and I think it's very compelling, and without further ado, let's jump into it. There we go. Okay, I think I'm gonna be advancing these manually here, but anyhow, we have the standard disclosures. Real quickly about Electromed: we're a respiratory care company, but really focused on airway clearance. I'm gonna talk more about what actually that means in a few minutes, but we're based in Minnesota. We're about an hour south of the Twin Cities, and we've been in business since 1992, publicly traded since 2010. We have 170+ employees strong, and all of our manufacturing is actually done in Minnesota. One of the things that we're proud of is the fact that many of the supplies which we use within our manufacturing are also sourced about 100 mi from our manufacturing facility, and what's good about that is, as you look at some of the supply chain challenges that are afflicting some of the companies across the planet, we're really kind of immune to that. We're about $50 million in revenue. We hope to eclipse that this year. Our fiscal year ended at the end of June, and we really have a very strong growth trajectory. Some of the highlights to that end are the fact that... One of the things that makes us really unique is that we're a micro-cap company, but we're growing, we're profitable. We are a leader in the airway clearance technology market. We're a manufacturer. The technology that we make is called High Frequency Chest Wall Oscillation. That's really the mechanism of action by which our product operates, and again, I'm gonna go into more detail on that in a minute. We also have a very attractive direct-to-patient model. In the home business, which is really where we operate, the home care market, most of the manufacturers will sell through durable medical equipment distributors. We're really unique in that we go direct to the patient. We work with providers in getting prescriptions for our technology, and I'll talk more about that journey as well. We've got a really strong financial profile, so we're growing, we're profitable, we're generating cash, and we have no debt. Let me shift gears here for a minute, and before I talk about the technology and more about the company, let me walk you through a little bit about the primary disease state, which we actually treat with our technology. It's a bit of a mouthful. It's called bronchiectasis or also known as BE, and what's unique about this unfortunate disease is that for those patients who are afflicted with bronchiectasis, it's chronic, and it's irreversible. And really, how does that manifest itself? Typically, a patient will have some kind of a disease where it's they're having mucus that's accumulating within their lungs, and they have an infection. That infection then leads to inflammation with the airway passages, and then they get into a vicious vortex of that recurring, and when that does reoccur, what happens is the airway passages inflate, and then mucus accumulates, and so this is, again, an irreversible, chronic disease. Now, one of the things that our device does is it actually removes that mucus from the airways, and again, I'll talk more about that in a minute. But what's exciting is, this disease is misdiagnosed, it's underdiagnosed, and our technology to relieve the symptoms for bronchiectasis are underprescribed, and we think that's the great opportunity, from an investment standpoint with Electromed. Why do I believe that? Well, in this iceberg, there's a lot to unpack here, so I'm not gonna go through everything that's on this slide. But today there's 824,000 patients who have been diagnosed with bronchiectasis, and of that, there's 127,000 that are actually on High Frequency Chest Wall Oscillation, and that's either from our technology or one of our competitors. Of those remaining 700,000 patients that have the disease state but aren't being treated with High Frequency Chest Wall Oscillation, about 230,000 of those are actually going to a pulmonologist, and pulmonologists are typically the ones who are prescribing this therapy. Pulmonologists are also the ones that our sales reps are calling upon, and if we could just unlock that, that's a $2.3 billion revenue opportunity, so really a lot of tailwind as far as that is concerned. If you go below the surface of that iceberg, that 4.1 million undiagnosed cases, that's really those patients that have overlap between COPD and bronchiectasis. As you can imagine, you know, many of these patients present at a pulmonologist's office who are typically seeing, you know, asthma patients and COPD patients. They'll diagnose the COPD, but many times what they'll miss is the bronchiectasis, and I think through market development, we look to unlock more of this iceberg. Okay, so how is bronchiectasis treated? Well, it's really not one modality of treatment that's required here. As I said before, you know, many of these patients, basically what they have is an infection. That infection needs to be treated with antibiotics. There's inflammation that also needs to be treated, but once all that's been done, the patient also needs to have that mucus released from their airways so that they can breathe easier and live a more active life, and that's really the triple-down effect of bronchiectasis. It's not just one modality of care. It's really pharmaceuticals in conjunction with medical device to treat the disease state. So how does it work? Well, our technology, as you've heard now, is HFCWO, and on the left-hand side of the screen, you see kind of a cartoon depiction of a patient wearing a vest. That vest is then attached to a hose. That hose is then attached to a generator, and what that generator does is it fills up the vest and creates pressure in the thorax of the patient, and it also releases the pressure. And by doing that oscillation therapy, really what you're doing is you're driving the mucus out of the smaller airways into the larger ones, so that the patient can then cough up or swallow that mucus. Since this is a chronic and irreversible disease, once a patient has been diagnosed with bronchiectasis and they get on our technology, this is a device that they need to wear every day, typically twice a day, 30-minute sessions, really for the rest of their lives. So, really, a very interesting technology. But again, we don't cure bronchiectasis. Really, what we're doing is we're helping our patients live more active lifestyles. We also, with our SmartVest Clearway, we have the newest, HFCWO product on the marketplace. We've really had an incredible market reception for this product, and the reason being is, multifaceted, one of which is it's smaller and lighter than our competitive products that are on the marketplace today. Also, most of our competitors have two hoses, whereas we have a single hose, so it's a lot, less cumbersome for an elderly patient to maneuver. Our vest is the lightest vest on the market. Many of our patients actually are either osteoporotic or, just have really difficult time tolerating a heavier vest, and so having a lightweight vest really leads to better compliance of using our technology and actually makes it a lot more comfortable for the patient. In addition to that, since this is used in the home, one of the things hopefully all of you notice is that it's a pretty good-looking product. Really nice industrial design on the SmartVest Clearway, and it's very intuitive to use. There's no on/off buttons. It's a touch screen that the patient use to activate the device, and again, it's very easy to use, and it looks pretty handsome within a patient's household. The other thing that we do in addition to having a great sales team, great product, is the service which we provide, and one of the services which we do provide, since we're a direct-to-patient model, is that once we get a prescription for our technology, we actually deliver that technology to the patient's home, and we have respiratory therapists who actually deliver the technology. At that point in time, they also do a baseline on what that patient's condition is, and they document that. We go back 6 days later. We also document how they're progressing after using our technology, and hopefully it's improving, and then we do that 30 days after that initial touch point. Reason this is important is because many of our providers are seeing, you know, upwards of 30 patients a day, and they wanna see when they prescribe this technology, is this actually having the intended outcome? And the good news is, by providing SmartNotes, it's a way for the provider to connect with the patient and really see how that patient is progressing on our technology, and it's very unique to what we provide at Electromed. Our device also has great clinical evidence, and so, you know, this is a product, as I'd mentioned before, that, you know, once you've been diagnosed, once you've been prescribed the technology, you're gonna be using it forever. And, the good news is that, the patients who use it, feel really strongly about it. We've got a 95% of patients who would recommend SmartVest to others. On the clinical side, we have found that patients who use SmartVest, 57% reduction in antibiotic use, which is fantastic, so one less medication that they need to take. 59% decrease in hospitalizations. You know, many of these patients will present at a hospital. They'll get then discharged, and the last thing that a hospital wants to have happen is for them to be readmitted, and so the good news is we help keep these patients out of the hospital and at home. And then there's 75% fewer emergency department visits as well. As you can imagine, prior to being on this technology, if you're having a hard time breathing, you're having a hard time being active, you wanna seek medical attention, and this is. This device actually helps prevent those patients from having to go back to the emergency department. So we feel great about the outcomes of this technology as well. I mentioned several times about the direct-to-patient model that we have. Most manufacturers in the home market, what they will do is their sales team will be calling on a durable medical equipment distributor. That durable medical equipment distributor will buy the product from them. They will also act as the sales channel for them to the actual end-use customer, and then the DME, since they're inventorying the product, will also provide that product to the patient. Our model is really different. At Electromed, we work directly with the providers themselves. We feel like HFCWO is still very much a clinical sale, and it's important for us to engage with the physicians to understand the technology and the benefits. And so we work with the providers directly. We get prescriptions from them, and then we actually help the clinics as well as the patients go through the payer landscape to make sure that they get reimbursed for the technology, and then we deliver it to the patient's home. And as I'd mentioned before, we do the training as well as the follow-up to make sure that they're progressing with the technology. The upshot of all this is that by not going through the DME, we actually get to harvest more of the margin, so we're a mid-70s gross profit margin company. Okay, where's our revenue? Most of it is in the home. About 95% is in the home. We have a nascent piece of our business within the hospital, as well as international. We do think near term, there's a bigger opportunity in the hospital market for us. As I mentioned before, many of these patients present in the hospital. We'd like to get them on the technology while they're there, and then as they get discharged, be able to have them on our device. But most of our sales reps are really focused on calling on clinics today, so we look at that as a new frontier for us. The payer type, about 50/50 split as to where our reimbursement comes from between Medicare and commercial payers, and we've got strong contracts with both. And then also when you take a look, I've been talking a lot about bronchiectasis, but there's also some other disease states that this technology serves, most notably CF and neuromuscular disease. So what's our strategy to grow? Well, we have a direct-to-patient model, and we're gonna continue to invest on feet on the street. It's been a winning solution for us in adding sales reps and shrinking the territories so that we can support more providers. We also have a really strong brand presence through direct-to-consumer marketing, and we're gonna continue to invest in that. As you can imagine, if you've got this condition, you're gonna wanna know, if you can't breathe, what are some other solutions that are out there that you can take advantage of? And direct-to-consumer marketing has been a real winner for us in getting to patients who can then get on our technology. That iceberg that I showed before, that iceberg, to unlock it, we really need to engage with many of the providers who, again, just aren't thinking about bronchiectasis when patients present into their offices. And so if we can get them thinking more about bronchiectasis, then we believe they're gonna start to diagnose more patients, and market development is a big initiative and investment that we're making. SmartAdvantage, as I said before, this technology isn't just about the product, and it's not just about, you know, when we deliver it to the patient, but it's also helping those clinics understand what it is that they need to do from a paperwork standpoint to get the patients on the technology. So our SmartAdvantage are really tools and equipment that the clinics can use to help support their patient population. And then lastly, e-prescribing. Kind of goes hand in glove with SmartAdvantage. We have a e-prescribing tool that we use with our clinics, it's free to them, where it can walk them through step by step, what are the pieces of documentation that they're gonna need to get a patient on this technology and make sure that that patient gets reimbursed and doesn't have an out-of-pocket expense. So what are our long-term objectives? We're anticipating, even though we don't give guidance, that we'll continue to have double-digit revenue growth. We have experienced this year phenomenal operating leverage in our PNL, and we expect that to continue going forward. You know, we've done that by really doing a great job of leveraging a lot of the investments that we've made in the past and using them to fuel our business in the future. So why invest in Electromed? I talked about the large, expanding market that we're in. Most of the patients that have bronchiectasis are over 65 years of age. There's 10,000 people who turn 65 every day. We feel like that patient prevalence is gonna continue to grow double digits, and we're gonna take advantage of that tailwind. We have clinically proven technology. We've got broad payer coverage, Medicare coverage, Medicaid coverage, as well as private insurance. The good news about Electromed, and I think this is one of the things that really differentiates us as a micro-cap company, is the fact that we're growing, we're profitable, we have no debt, and we're generating cash. We feel like we're in a really unique space. The other thing I wanted to, as we're closing up here, just share with everybody, is that unlike maybe some of the other companies that you may see, you know, my incentive compensation is largely tied to improving total shareholder return for our investors. And so, you know, if our stock price doesn't go up, I don't benefit, as it should be. Additionally, when I started a year ago, one of the things that I changed for our management team is all of their incentive compensation is predicated on hitting financial milestones versus individual MBOs, and we feel like that really aligns with what our investors are expecting from us in the business. We also think this is a really attractive valuation. So when you take a look at, you know, any of these metrics, sales growth, enterprise value over revenue, gross margin, operating margin versus our peer group in the Russell Microcap Index, we feel like we outshine all of them, and as a consequence, we feel like our stock is really undervalued. So with that, I think we've got some time for questions. Hopefully, this was a good use of everyone's time. We really appreciate the attention and interest in Electromed, and I think we may have time for a couple of questions. John? Brad, you wanna join me? How would you like to do this, John? Yeah, sit here. Okay. Sit there. Perfect. Okay, great. Well, thanks for that really great overview of Electromed. You know, first, I just want to talk about the TAM, the slide that you showed before. Just, you know, pretty low penetration rate today in your overall TAM for BE. You know, the focus today, you're doing a lot of DTC marketing, and you're also working on this hospital account thing, hospital account expansion. Just walk us through essentially how you think you could just penetrate deeper into that TAM? . Well, you know, as I mentioned before, I, I think you can hear with mine, and Brad, feel free to jump in here as well. You know, one of the things that is really exciting, and it's really occurred within the last probably two years, is that we're seeing more and more providers actually on podium in some of the large respiratory-focused conferences, and that hasn't been the case in the past. And so we do feel like there's a lot more awareness of bronchiectasis, and what we're trying to do is create a flywheel on that. So we're investing in, there's a couple of foundations that are really impactful in this space. So NTM bronchiectasis, which is part of the COPD Foundation, we're investing in that. What that does is it's gonna give us exposure to their registry of patients, so we can start to mine that data and understand really what does a perfect patient look like for this type of technology. The other thing, and I think it may be a surprise, is that there actually are no guidelines in the United States today for treating bronchiectasis patients. We believe by the end of this year, those guidelines will be coming out, not only for the United States. There have been guidelines in Europe that are getting revised right now, and we think that one-two punch is actually gonna, you know, continue that momentum of more and more patient awareness and physician awareness, and that's really what it's gonna take. Great, and then can you just talk about the reimbursement that's in place, say, to support this? Sure. Brad, you may wanna take that. Sure, yeah. We've been really excited about the fact that our Medicare reimbursement has been really strong, and it's been tied to the Urban CPI. So as inflation has gone up, our pricing on our product has actually gone up as well. A lot of the commercial insurance payers tend to follow suit, maybe take a little bit of a haircut off of that Medicare reimbursement, but still really healthy and are typically tied as a percentage to Medicare reimbursement. So as Medicare reimbursement goes up over time, that's the commercial payers do as well, creating a tailwind for us on the payment side. It does sound like a large majority of the population is Medicare age, but on the commercial side, how much covered lives do you have today? Do you have to continue to work to expand that, and maybe what ASPs are you seeing, you know, based on the reimbursement? Sure. So yeah, about half of our business historically has been Medicare. We've seen a trend where Medicare patients are moving to commercial Medicare, but the ASP on our, our product kind of all in, net of returns, net of everything, tends to be about $10,000 per patient. Do you get any additional reimbursement for the teaching that you do, too, around the vest or anything like that? No. Nope, no, no reimbursement for that. That's just part and parcel of the service that we provide. The other thing I think it's worth noting is that, with our technology, it's a lifetime warranty. So, you know, once we get that technology in place with the patient, even though it's a capped rental with the payers, by the time that that rental payment is exhausted, that patient gets to keep the technology for the duration of their use. What other treatments are there out there? I know you talked a little bit about reduced antibiotic usage, but can you just walk us through the pathway for treatment and also, how you're leveraging that reduced antibiotic usage data? Yeah, no, it's a great question. You know, we are with the providers. I think the challenge is the easy button for them is a patient presents, the patient has an infection. What's the first line of defense that they're gonna use? They're gonna write a prescription for an antibiotic and get them out the door. The other thing that's kind of nuanced about reimbursement for our technology is that they've and I was trying to get to that in my presentation, is the fact that there are a couple of criteria that are necessary for the patient to actually get reimbursed on this technology, and one is that they've tried and failed another lesser technology before getting HFCWO. That could be anything from manual percussion, believe it or not, on the back, to an OPEP device, which think of almost like breathing into a kazoo to help facilitate somebody coughing, but that is part of the criteria. Again, what we're trying to do is get patients on the technology sooner in their care continuum versus later, and I think when we do that, that's really gonna open up that TAM. The hospital business has been growing significantly, though it's still small numbers- Right ... today. Can you just talk about just the importance and the focus on that market? Well, we just don't have, you know, most of our sales reps, since we have a direct sales team and we don't have an army, I would say we have more of a platoon, they're predominantly focused on the clinics, and that's in working hand in glove with the pulmonologists who are writing these prescriptions. We find, like, that's probably a faster way to revenue than the hospital market because the sales cycle in the hospital is a lot longer. It has to be part of their capital budget, has multiple committees that, you know, the technology needs to go through. It's more price sensitive. You know, we negotiate on price within the hospital market. But we still feel like there's a very large opening for us since we have such a small market share there. What I'm really most excited about is not just getting the capital revenue from that market. What I'm most excited about is getting patients on our technology go: "You know, we love SmartVest. It worked really well. I've got this condition. I'm going home. I need to have that same solution at the home," and it being SmartVest. Then sales force size today, I know it's a platoon, not an army. How many is it, and are you planning on growing into an army at some point? Well, we're slowly growing it into an army. So we have around 54 sales reps that are direct sales reps today. We have six regional managers. Our fiscal year just started at the beginning of July. We just added another region to give those regional managers more sales rep focus and also regional focus, and we'll be adding more sales reps in our fiscal year 2025 as well. Great. This time for one last one, just, you know, do you plan on growing profitability, or do you continue to reinvest in the business to drive faster top line growth? Both. You know, we're not gonna shortchange the business 'cause we feel it's important to drive the top line growth. But we also feel like some of the investments, as I mentioned, are starting to pay dividends. Brad and his team, you know, a year and a half ago implemented a new ERP system as an example. That's given us great insights into the business and, you know, those types of reimbursement team, we've made changes there so that in the past, it used to be, as we hired a sales rep, we needed to hire somebody one-to-one as a reimbursement complement to that person. And we've got a lot more leverage in that team because they've become a lot more efficient, where we don't have to do that anymore. Great. Thanks so much, Jim and Brad. You're welcome. Really appreciate it. Thank you. Thanks. Thanks, everyone. Appreciate it.